MARKET WRAP: Indices slip as financials weigh; Rupee hits new low of 70.3/$

The Nifty Bank index ended lower, slipping 0.70 per cent lower weighed by Bank of Baroda and Yes Bank.

9:04 AM

Markets at pre-open

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	37,871.42	+19.42	+0.05
S&P BSE SENSEX 50	11,982.30	+17.24	+0.14
S&P BSE SENSEX Next 50	33,855.52	+46.88	+0.14
S&P BSE 100	11,717.28	+16.75	+0.14
S&P BSE Bharat 22 Index	3,595.66	+11.66	+0.33

(Source: BSE)

8:58 AM

Stock calls by Religare broking

 

Dr. Reddy's Laboratories

Rec: BUY

Last Close: Rs 2,278.45

Initiation range: Rs 2,270-2,280

Target: Rs 2,400

Stop loss: Rs 2,215

 

Dr Reddy's, after breakout from its consolidation zone, has retraced marginally of late and has formed a base around its price support level around 2025. It has again rebounded swiftly from thereon and found support around the support zone of 200 EMA on daily chart. We believe it’s an excellent buying opportunity especially for those who have missed it earlier.

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8:55 AM

IDBI Capital on Oil India

Oil India (OIL) Q1FY19 result came as a mixed bag where Revenue and EBITDA was largely in line with our estimates while net profit was a miss to our estimates owing to higher tax expenses and lower other income. Revenue was up 45.4% YoY to Rs33.9bn, while EBITDA was up by 61.1% YoY to Rs14.1 bn and PAT was up 56.2% YoY to Rs7bn.

Oil production remained flattish YoY to 0.844mmt while gas production volume declined 4% YoY to 696mmscm. Oil net realization was up 49% YoY to US$72/bbl while calculated gas realization was up 25% YoY to Rs7.4/scm. We raise our EBITDA/EPS estimates by 36%/33% for FY19E and 15%/14% for FY20E on higher crude oil price and exchange rate assumption. Therefore, we raise our target price to Rs 250 from Rs 237. We upgrade the rating to BUY from ACCUMULATE

8:53 AM

Stock calls by HDFC Securities

 

Buy Infosys

CMP: Rs 1,409

Target: Rs 1,495

Stop-loss: Rs 1,347

 

Stock has broken out from the price consolidation which held in last 1 month. Stock has registered new all-time high with healthy volumes. Recent depreciation in rupee against the dollar is going to impact positively to the entire IT sector. Rupee has reached at the all-time low level, nearing to 70. Nifty IT Index has also broken out from the last 1 month price consolidation. Being large cap IT Company, Infosys is likely to continue its upwards journey with new milestones. We recommend buying Infosys for the upside target of 1495, keeping SL at 1347.

 

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8:50 AM

Edelweiss on Amber Enterprises

As a market leader in the domestic room AC (RAC) segment, Amber Enterprises (AEL) is riding the surge in AC demand, coupled with the strong outsourcing tailwind. This augurs well for the company given its focus on manufacturing capability addition moving it up in AC value chain.

We expect rising market share to drive 44% earnings and 25% EBIDTA CAGR over FY18-21E; though with moderate returns given sustained investments to move up the value chain. Our target price of Rs 1,295 is at 30% discount (at 22x PE) to consumer durables sector valuations, given high growth/lower cash flows. Initiate with ‘BUY’

8:49 AM

Stocks in news

·         RBI rejected Kotak Mahindra Bank’s plan for dilution of promoter stake

 

·         Reliance Industries said that one of its units at its Jamnagar refinery has been shut down temporarily

 

·         Shilpa Medicare to set up arm for North American operations

 

·         Siyaram Silk Mills commenced production of indigo at Amravati unit

 

·         Svendgaard Labs approved expansion manufacturing facilities at Kheri

 

·         Jindal Worldwide board approved stock split of 5:1

 

·         NCLT approved demerger of Cox & Kings forex division

 

·         Monsanto India clarified that news of a lawsuit by cancer patient pertains to its U.S. arm

 

·         Fortis Healthcare holders clear IHH proposal to buy company

 

·         GMR Infra executed settlement agreement with PE investors for its airport arm

 

·         Allcargo Logistics in talks to buy controlling stake in Gati

 

·         Jet Airways seeks to raise Rs 5000 crore to pay debt

(Source: IIFL report)

8:47 AM

IIFL on Sadbhav Engineering

The Company is targeting order inflow of ~Rs.65bn in the remaining period of FY19 which would further strengthen its position. With strong order book and expected pick-up in execution, we expect company to witness robust revenue growth over the next few years.

Tight cost control and high-margin order book are likely to translate into healthy earnings. We have revised our estimates marginally lower to incorporate the Q1 performance. At CMP, EPC business is trading at 15.7x FY20E P/E. We maintain our Buy rating for revised target price of Rs. 394 (based on SOTP valuation).

8:47 AM

Anand Rathi on Deccan Cements

Rising demand in AP/Telangana (53% of its sales) aided Deccan Cements in reporting firm revenue growth. It will continue, however, to be impacted by rising costs. We expect its deleveraging and rising Government investment in its key operating region to boost its PAT at a 22% CAGR over FY18-20. We have a Buy recommendation on the stock, with a target price of Rs 600

8:45 AM

Emkay Global on Camlin Fine Sciences

Robust growth in the high-margin Blends business and improved operational performance illustrates that our investment thesis is playing out as envisaged. We maintain our FY19E/20E EPS estimates and target price of Rs183 with a Buy rating

8:45 AM

MARKET COMMENT Amar Ambani, head of research, IIFL

While India celebrated it’s Independence Day, the world markets came tumbling down.  The outlook is a weak start with focus on banking counters especially Kotak Bank. Foreign investors have upped their buying in recent days and August has been a positive month as far as net FPI flows are concerned.

Prime Minister Narendra Modi, during his Independence Day speech, highlighted that India has become a destination of multi-trillion dollar investments, due to various economic measures and structural reforms by the government. India's GDP stood at $2.597 trillion in 2017 at current prices in market exchange rates overtaking France recently.  With the rupee in turmoil, the street will pay focus to currency movement. Minutes of recent RBI monetary policy committee meeting will be released today

8:43 AM

Nomura on Coal India

in the backdrop of a healthy earnings outlook and inexpensive valuations, we think risk-reward remains favourable and the Government of India’s (GoI) disinvestment overhang related bouts of stock price corrections offer good buying opportunities. Our FCFF-based target price nudges up to Rs 320 from INR318 previously, implying 21% total upside (13% implied upside from the current market price and 8% dividend yield).

8:40 AM

Top trading ideas by Prabhudas Lilladher

 

BUY RELIANCE CAPITAL

CMP: Rs 437.25

TARGET: Rs 485

STOP LOSS: Rs 410

 

The stock has given a decent rally from the bottom made at around 335 levels and has improved the bias to signify strength for further upside movement. Currently, after a short correction, the stock has bounced back well and we anticipate a further bounce to scale till 480-490 levels in the coming days. With decent consistent volume participation witnessed, we recommend a buy in this stock for an upside target of 485 keeping a stop loss of 410.

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8:35 AM

Nifty outlook by Prabhudas Lilladher for today

 

Nifty once again closed above the 11,370 level on Tuesday. However, the daily trend being down, Nifty would continue to have a range bound move. The support for the day is seen at 37,600/11,360 while resistance is seen at 38,080/11,490. Bank Nifty would have a range of 27,750-28,260. With rupee at its lowest value, IT Sector as mentioned earlier would continue to do well and Pharma index getting into a new round of momentum would now show further upmove. Infy, Sun Pharma, and Auro Pharma would be the flavor of the month.

8:31 AM

Comfortable forex reserves to deal with undue rupee volatility: Jaitley

 

Union Minister Arun Jaitley said India has comfortable foreign exchange reserves to deal with any undue volatility in the currency market and developments are being closely monitored.

 

"India's foreign exchange reserves are comfortable by global standards and sufficient to mitigate any undue volatility in the foreign exchange market," Jaitley said.

8:27 AM

Rupee close at 69.89/$ after falling to an all-time low of 70.08

 

After falling to a historic low of 70.08 to the US dollar during the day, the rupee on Tuesday ended at 69.89, up 2 paise from its previous close of 69.91. Weakness in Turkish currency (lira), along with panic among importers led to the selloff in the Indian currency.